California Real Estate Practice Exam

Which type of lien allows a party to claim payment from property itself if they haven't been made whole?

1. A mechanics' lien

2. A judgment lien

3. A state inheritance tax lien

4. A vendor's lien

The correct answer is: A mechanics' lien

The mechanics' lien is designed specifically to protect contractors, subcontractors, and suppliers who have provided labor or materials for the improvement of real property. If they are not compensated for their work, a mechanics' lien allows them to secure a claim against the property itself. This means that they can seek payment directly from the property's value, which can be particularly important in ensuring that they are "made whole" for the services or materials already rendered. By placing a lien on the property, the claimant can initiate legal proceedings to enforce the lien, potentially leading to the sale of the property to satisfy the debt owed. This mechanism serves to provide security to those contributing to property enhancements, ensuring they have a legal recourse for recovery when payments are not made. In contrast, judgment liens are typically associated with court judgments where a creditor has received a ruling against a debtor but doesn't specifically pertain to services rendered on the property itself. A state inheritance tax lien concerns debts owed to the state for inheritance taxes based on estate assets and is not related to services rendered. Meanwhile, a vendor's lien usually pertains to the seller's right to retain possession of goods until they are paid for, rather than a claim against real property like a mechanics' lien. Thus, the mechanics